I.

Contribution to business objectives

Supply Chain Management (SCM) is crucial for businesses to achieve their goals, especially
when it comes to sustainability and ethical practices. How SCM contributes to business goals:

- Improving Environmental and Social Performance: By working with suppliers to

enhance environmental and social performance, companies like H&M not only meet
regulatory requirements but also align with consumer expectations for sustainable practices.
This contributes to brand reputation and customer loyalty, ultimately leading to increased
sales and profitability.

- Building Long-term Partnerships: Collaborating with suppliers who share the

company's values fosters trust and stability within the supply chain. Long-term partnerships
promote reliability, efficiency, and innovation, all of which are essential for achieving
business objectives such as cost reduction, product quality improvement, and market
expansion.

- Compliance and Performance Measurement: Implementing programs like the

Sustainable Impact Partnership Programme (SIPP) allows companies to assess supplier
compliance with sustainability standards and track performance over time. This ensures that
suppliers meet minimum requirements while also encouraging continuous improvement,
which positively impacts operational efficiency and risk management.

- Capacity Building and Risk Mitigation: Supporting suppliers in identifying priority

areas and setting sustainability goals not only strengthens their capabilities but also mitigates
risks related to environmental, social, and ethical issues. By investing in supplier
development, companies reduce the likelihood of supply chain disruptions, enhance
resilience, and maintain a competitive edge in the market.

II. Sustainable SCM- Observing ( S in SCM is vital: states, trends, research)

The sustainable trends of SCM & compare them with H&M:

- Transparency and Traceability: Sustainable SCM trends emphasize transparency and

traceability throughout the supply chain.

+ H&M's commitment to assessing and verifying supplier compliance using industry-

wide tools like the Sustainable Apparel Coalition's Higg FEM and FSLM
demonstrates a focus on transparency and accountability.

- Circular Economy Practices: Companies are increasingly adopting circular economy

practices to minimize waste and maximize resource efficiency.

+ H&M's efforts to extend the lifespan of products through initiatives like garment
collection and recycling align with this trend, promoting sustainability and reducing
environmental impact.

- Ethical Sourcing and Fair Labor Practices: Ensuring ethical sourcing and fair labor
practices is a key aspect of sustainable SCM.
 + H&M's initiatives to prevent recruitment fees for migrant workers and address human
rights issues across supply chains reflect a commitment to ethical sourcing, promoting
social responsibility and worker welfare.

III. Problem addressing( Current & Potential)

- Supply Chain Disruptions: Global events like natural disasters, pandemics, and
geopolitical conflicts continue to disrupt supply chains, highlighting the need for greater
resilience and agility. Future developments may involve leveraging technologies like
artificial intelligence, blockchain, and predictive analytics to anticipate and mitigate supply
chain disruptions proactively.

- Ethical and Social Challenges: Despite efforts to address ethical and social issues in
the supply chain, challenges such as forced labor, child labor, and unsafe working conditions
persist in certain regions and industries. Future developments may involve enhanced
collaboration among stakeholders, regulatory frameworks, and supply chain transparency
initiatives to tackle these challenges effectively.

- Environmental Sustainability: Climate change and resource depletion pose significant

risks to supply chain sustainability. Future developments may involve transitioning towards
renewable energy sources, adopting eco-friendly materials and production processes, and
implementing circular economy practices to minimize environmental impact and enhance
long-term sustainability.

- Digital Transformation: The increasing adoption of digital technologies in SCM, such

as IoT, big data analytics, and cloud computing, presents both opportunities and challenges.
Future developments may involve leveraging digital platforms and ecosystems to streamline
supply chain operations, enhance visibility and collaboration, and drive innovation across the
value chain.

=> SCM plays a critical role in helping businesses achieve their goals, especially in terms of
sustainability and ethical practices. By addressing current challenges and embracing
emerging trends, companies can enhance supply chain resilience, competitiveness, and
sustainability, paving the way for a more prosperous and responsible future.

H&M supply chain management ecosystem:

The Supply Chain Management Ecosystem consists of three interconnected levels: Factory
Level, Industry Level, and Country/Community Level.

Factory Level:

Supplier Performance Indicators: These include FEM/SLIM indicators, Sustainability Index

scores, non-compliances, grievances, and incidents.

Risk and Impact Assessments: Evaluate potential risks and impacts at the factory level.

Industry Level:

Capacity Building and Training: Focuses on enhancing skills and capabilities within the
industry.

Tailored Action Plans: Customized plans to address specific needs or issues.

Monitoring and Performance Assessments: Regular evaluations to ensure optimal

performance.

Strategic Programmes, Roadmaps, and Collaborations: Long-term planning and partnerships

for sustained growth.

Country/Community Level:

Enabling Environment: Involves country-level regulations, governance, and industrial

relations to create a conducive environment for operations.

Prioritization: Focuses on countries based on an assessment of salient human rights issues

such as wages.

Country Strategies: Addresses prioritized environmental and human rights risks to drive
positive impact in specific countries or communities.

Public Affairs: Handles public relations and communications at the country/community level.
=> This ecosystem ensures a holistic approach to supply chain management, considering
social, environmental, and economic factors across different levels

Content extracted from articles/research:

1. Current situation of supply chain:

The current state of H&M's supply chain and its ethical practices. Despite some progress in
sustainability initiatives, the brand falls short in various areas:

● Environmental Impact:
- H&M has set a science-based target to reduce greenhouse gas emissions but
lacks evidence of being on track to meet it.

- The brand stocks a "Conscious" sustainable fashion collection and offers a

recycling program, but these efforts are insufficient to offset its unsustainable
business model.

- While H&M uses some lower-impact materials like organic cotton and
recycled polyester, the majority of its materials are not eco-friendly.

● Labour Conditions:

- Despite joining the Bangladesh Fire Safety Accord after the Rana Plaza
disaster, H&M failed to fulfill its promise to pay 850,000 workers a living
wage by 2018.

- Reports have highlighted labor abuses in factories supplying H&M, including

cases of abuse of female garment workers and workers' rights abuses in
Myanmar.

- H&M lacks evidence of ensuring payment of a living wage across its entire
supply chain and has almost none of its supply chain certified by labor
standards ensuring worker rights.

● Animal Welfare:

- H&M has policies aligned with Five Freedoms for animal welfare and traces
some animal products to the first stage of production.

- It uses wool from non-mulesed sheep and down and feathers accredited by the
Responsible Down Standard but still uses leather and exotic animal hair.

- The brand aims to have all its animal fibers certified to a credible standard by
2025.

-> Overall Assessment:

Despite setting sustainability targets and adopting positive practices, H&M remains one of
the largest producers of fast fashion, contributing to environmental degradation.

H&M's business model perpetuates the cycle of disposable fashion, contributing to

significant environmental impact and labor rights issues.

(https://goodonyou.eco/how-ethical-is-hm/ )

● H&M receives a "Not Good Enough" rating in all three categories:

- Environmental Impact:

H&M utilizes some lower-impact materials, including recycled materials, but operates
under an unsustainable fast fashion model with rapidly changing trends.

While it has set a science-based target to reduce greenhouse gas emissions, there is no
evidence it is on track to meet this target.

The brand has published a biodiversity protection policy for some of its supply chain.

- Labor Practices:

Little of H&M's supply chain is certified by crucial labor standards ensuring worker
health, safety, and living wages.

Despite receiving a score of 71-80% in the Fashion Transparency Index, H&M lacks
evidence of supporting diversity and inclusion or ensuring living wages for workers.

During the COVID-19 pandemic, it did not disclose adequate policies to protect
workers in its supply chain.

- Animal Welfare:

H&M has a formal animal welfare policy aligned with the Five Domains.

It uses leather, exotic animal hair, and silk, but does not use fur, angora, or exotic
animal skin.

Some of the wool and down it sources are certified by responsible standards, and it
traces some animal-derived materials to the first production stage.

(https://directory.goodonyou.eco/brand/h-and-m?
_ga=2.245568192.593739839.1708943952-
321920752.1708075410&_gl=1*1iyj33x*_ga*MzIxOTIwNzUyLjE3MDgwNzU0MT
A.*_ga_TTB1J3Q9MN*MTcwODk0Mzk1MS4yLjEuMTcwODk0NDAyNi42MC4w
LjA.)

2. Contribution to business objectives

Sustainable SCM, observing ( S in SCM is VITAL: stats, trends, Researchs

Problems addressing ( current and potential)

a.Theory: The Need for Sustainable Supply Chain Management in Fast Fashion

Contribution to H&M's Business Objectives:

Fast fashion's environmental impact poses a significant threat to global ecosystems and
climate stability. The fashion sector, including H&M, contributes significantly to greenhouse
gas emissions (GHG) and textile waste.

H&M's supply chain, like many fast fashion brands, spans across developing countries with
lower environmental regulations. This leads to fragmented supply chains, use of synthetic
materials, and overproduction, all of which exacerbate environmental issues.

The urgency for H&M and similar companies to address these environmental challenges due
to consumer awareness and demands for change.

Without effective Sustainable Supply Chain Management (SSCM), H&M's contribution to

climate change will continue to rise, posing risks to their brand reputation and future
sustainability.

Content Related to SSCM (Attached Statistics, Trends):

Statistics from sources like the IPCC and research studies underscore the significant impact
of the fashion industry on climate change, emphasizing the need for sustainable practices.

The environmental impact of fast fashion, including GHG emissions, textile waste, and
overproduction. It provides specific data points, such as the amount of GHG emissions
attributed to the fashion sector.

Trends in consumer awareness and demand for sustainability are highlighted, indicating a
growing market pressure on companies like H&M to adopt more sustainable practices.

Contribution to H&M's Business Objectives:

Fast fashion's environmental impact poses a significant threat to global ecosystems and
climate stability. The fashion sector, including H&M, contributes significantly to greenhouse
gas emissions (GHG) and textile waste.

H&M's supply chain, like many fast fashion brands, spans across developing countries with
lower environmental regulations. This leads to fragmented supply chains, use of synthetic
materials, and overproduction, all of which exacerbate environmental issues.

Without effective Sustainable Supply Chain Management (SSCM), H&M's contribution to

climate change will continue to rise, posing risks to their brand reputation and future
sustainability.

b.Applying innovative SSCM methods to fast fashion supply chains

Fast fashion brands face critical environmental challenges in their supply chains. To address
these, they must innovate in both upstream and downstream activities, fostering sustainability
throughout the entire lifecycle of their products.

Upstream activities
Decarbonizing material production and processing

Reducing the carbon footprint of material production and processing is crucial. Brands can
promote sustainable practices such as targeted fertilization in cotton farming to minimize
emissions. These initiatives should be integrated into supplier criteria and incentivized
through partner programs.

Improving energy efficiency and utilizing renewable energy

Enhancing energy efficiency in manufacturing processes, particularly for synthetic materials,

is vital. Transitioning to dry processing methods, like laser dyeing, can significantly reduce
energy consumption. Brands can incentivize energy-saving practices by investing in
renewable energy infrastructure in their supply chain partners.

Incentivizing decarbonization and energy developments

Partner programs can be revamped to prioritize sustainability investments over short-term

gains. Brands like H&M can reward suppliers with support for adopting renewable energy
sources and implementing energy-efficient technologies. This approach fosters long-term
sustainability and strengthens supply chain relationships.

Downstream activities

Four R’s: Recycling, Rental, Repair, and resale

To minimize waste and extend product lifecycles, brands should focus on recycling, rental,
repair, and resale initiatives.

Transparency with consumers

Enhancing transparency about the environmental impact of products and operations is crucial.
Brands must provide comprehensive data on carbon emissions throughout the supply chain.
Transparent reporting empowers consumers to make informed choices and fosters
accountability in the fashion industry.

c.Creating greener products

Life cycle assessment (LCA)

Conducting life cycle assessments (LCAs) helps brands understand the environmental
footprint of their products. By analyzing each stage of the supply chain, brands can identify
areas for improvement and prioritize sustainable practices.

Investing in sustainable and recyclable materials

Innovations in raw materials are key to sustainable fashion. Brands should invest in research
and development of eco-friendly alternatives to traditional materials like polyester. Recycled
and organic inputs offer promising solutions for reducing environmental impact.

d.Future research
Future research should focus on improving recycling methods for synthetic materials,
researching cost-effective alternatives to traditional inputs, and analyzing the human rights
implications of fast fashion supply chains. These areas of study are essential for advancing
sustainable supply chain management in the fashion industry and addressing pressing
environmental and social challenges.

Fig. Suering and Müller's Framework for SSCM